How to Become a CPA
What is a CPA?
CPA is an acronym for a certified public accountant, who is an individual that has been qualified according to requirements set by the state and the organization where they wish to work. Becoming a CPA is a feat that is respected by both clients and professionals because it indicates a degree of rigor and educational achievement. Accounting, handling taxes, auditing company finances, and managing short or long term financial goals of a client are some of the tasks a CPA might perform.
The overall process
First, to become a CPA and to be eligible to take the exam; 150-hours of college credit are needed. 150-hours in most circumstances is equivalent to 5 years. Next, the exam must be passed. The Uniform CPA Exam is taken by computer and has four sections. Lastly, experience is required to practice which can range from one year to two years depending on the state in audit or tax work.
Step 1: Fulfill college education
In the name of competency and knowledge of the latest technologies, 150 semester hours became a prerequisite to attain a CPA certificate. Some colleges offer programs specifically for students who wish to be CPA’s that have the option of becoming a graduate program after the initial Bachelor’s Degree had been obtained. The courses are rigorous and are put in place to create an ability to understand difficult financial situations and concepts.
Step 2: Apply for the exam
To apply for the exam, the candidate must be asserted as eligible by their dominion. Next, the National Associate of State Boards of Accountancy or NASBA will send information on the cost of the exam and the notice of schedule (NTS). Admission without a NTS into the testing facility is prohibited. To schedule the exam, Prometric, the authority on registration and administration of the exam, should be contacted.
Step 3: Pass All 4 Sections
In total, it requires 14-hours to complete all parts; however, the parts can be separated as long as they are all passed within 18 months. One part will pertain to finances; this part is recognized as having the most information including the differences between GAAP and IFRS. Auditing also has a place within the exam and covers the whole procedure from engagement to professional responsibility. Regulation is also part of the exam and it contains ethics, regulation, and federal taxation laws. The business section has a wealth of topics inside of it and the 3 written assignments that count as 15% of your score.
Step 4: Take Ethics Exam
Many states request an ethics exam be passed as the final step to earning licensure. The exam can be taken at any time around the test, even during the test, within a 2 year period. The purpose of the exam is to assure that the individual is aware of rules and accepted conduct in the profession. It 40 multiple choice questions and a 90 is a passing score.
Step 5: Turn experience requirements
Experience is yet another component a CPA must clear to be allowed to practice. The number of years and types of experience vary from state to state but usually 2 years of public accounting will be accepted, other industry work may be considered. In those circumstances, it will have to be for more than 2 years. A two-tier and one-tier system exists. In a one-tier system, the certificate and license both aren’t given until the experience is met. A two-tiered system releases the certificate upon completion of the exam and the license when the experience requirements are met.
To conclude, CPAs have strict education, examination, ethics, and experience requirements to fulfill before a license is issued. It is a highly-demanded profession certification that is valuable to the client and the CPA themselves.